Cage-free eggs could cost even more with new California law

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California voters overwhelmingly approved Proposition 12 in November, but North Bay poultry farmers warn they may not be so enthusiastic when they see what omelets will start costing a year from now.

Prop. 12 brings the specificity on minimum space per calf for veal, breeding pigs and egg-laying poultry that Prop. 2 of 2008 didn’t, and it bans the sale of noncompliant products. Starting in 2020, each calf raised for veal must have 43 square feet of floor space, and hens (chickens and other fowl) would have to be raised with at least 1 square foot (144 square inches) of space.

Common cages at California egg farms hold seven or eight hens, but 144 square inches per bird would limit each to five or six hens, according to Arnie Riebli, partner of Petaluma-based Sunrise Farms. With about 1 million production hens, it could be the North Coast’s largest egg producer.

Likely in mid-2019, egg farmers will start reducing flock sizes, because that’s more cost-effective at this stage of Prop. 12 implementation than investing in new cages, he said.

“We will not have more hens than we have today,” Riebli said.

A similar reduction in flock size came after the implementation of Prop. 2 in 2015, when 7 million fewer commercial hens were in production than in 2014, according to a UC Food Observer story.

In 2022, Prop. 12 calls for sows and their piglets to have at least 24 square feet and hens to be raised cage-free indoors or outside, based on United Egg Producers 2017 guidelines.

At that point, egg farmers with cages will have to spend roughly $20 a hen for equipment and installation to convert their barns to cage-free operations, Rielbli said.

“You will probably see some folks retire, because the cost of the investment is just too great,” Riebli said.

About seven years ago, as the start of Prop. 2 rules loomed, Sunrise Farms started investing millions of dollars in converting to cage-free production. A new barn with that kind of equipment could cost $35 a hen, he said. Factors in amortizing the capital investment over 15 years for the building and five years for equipment are an average hen can lay 240 eggs annually and a barn may have over 100,000 hens.

“I looked ahead at the handwriting on the wall,” Riebli said.

Today, 85 percent of Sunrise Farms hens aren’t in cages. But that shift hasn’t dissuaded animal-welfare advocates. In 2018, Berkeley-based Direct Action Everywhere brought hundreds of protesters to Sunrise and multiple other Petaluma egg farms, with some activists removing birds they consider unhealthy.

Consumers may start seeing the first cost implications of the new rules at the grocery store or restaurant menu as the first deadline approaches, Riebli said.

“The first shock impact will be in early 2020,” he said.

Poultry accounted for $17.8 million in sales from Marin County farms last year, making up roughly half of the county’s livestock meat production for 2017, according to the crop report. Eggs, egg byproducts amounted to $39.7 million in sales last year in Sonoma County, where eggs are separate from poultry meat.

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